Case: Gould v Brown [1998] HCA 6 ; (1998) 193 CLR 346
Outcome: cited
The applications by Hayes Knight in the Examination Proceedings and the Judicial Review Proceedings came on for hearing on 18 November 2005. In opening, counsel for Hayes Knight, Mr Donaldson SC, drew the Court's attention to a passage from the judgment of Gaudron J in Gould v Brown [1998] HCA 6 ; (1998) 193 CLR 346 at 405 in which her Honour said: '... to the extent that the power conferred by Ch 5, Pt 5.9 is not confined to examination by a court which has exercised or is exercising jurisdiction to make an order for the winding up of the corporation, it is not properly characterised as judicial power.' Counsel submitted that there was a question whether Pt 5.9 went beyond the judicial power of the Commonwealth to the extent that it authorised examination unrelated to a matter, such as the winding up of a corporation. Discussion ensued about the possibility of transferring the matter to the Supreme Court of Western Australia but, as was pointed out by counsel for Hayes Knight, that did not cure the difficulty as the Supreme Court would still be asked to exercise federal jurisdiction and so confined by the constraints of Ch III of the Constitution . In the event, the hearings were adjourned to enable the parties to consider their positions. Ultimately Notices of a Constitutional Matter were given under s 78B of the Judiciary Act 1903 (Cth) to the Attorneys-General of the Commonwealth and the States. 24 On 8 February 2006 ASIC filed a notice of intervention in the Examination Proceedings in relation to the Hayes Knight application to discharge the examination summons. Both applications were subsequently relisted for hearing on 24 and 25 May 2006. 25 In the Examination Proceedings a "Minute of Proposed Amended Interlocutory Process" was filed on 3 November 2005. On 7 November 2005 Siopis J directed that it stand as the amended interlocutory processes of Hayes Knight and Mr O'Brien. That is the document that can be regarded as the initiating document in the discharge application brought by Hayes Knight and Mr O'Brien. 71 The cross vesting arrangements under the Corporations Law were challenged in Gould v Brown as an element of a challenge to the exercise of the examinations power under ss 596A and 596B by the Federal Court. The High Court divided evenly on the challenge to the cross vesting scheme which was therefore upheld as it had been in the Full Federal Court below. It was, however, only a matter of time before the validity of the cross vesting arrangements would come up again for consideration by the High Court. They did so and were held by a majority in Re Wakim; Ex parte McNally [1999] HCA 27 ; (1999) 198 CLR 511 to be invalid to the extent that the State Corporations Laws purported to confer jurisdiction on the Federal Court. 99 In Gould v Brown summonses for examination issued by the Federal Court under ss 596A and 596B of the Corporations Law were challenged on the basis that the Court had no jurisdiction to issue them or conduct examinations. The first basis of the challenge, which failed, on the evenly divided vote of the Court, was that the State Parliaments had no power to invest in the Federal Court jurisdiction in matters arising under the Corporations Laws of the States. The second basis, relevant here, was that the examination function conferred on the Federal Court by the State laws did not involve the exercise of judicial power. 102 Gaudron J held that Ch III would preclude conferral on the Federal Court of a non-judicial examinations power "not confined to examination by a court which has exercised or is exercising jurisdiction to make an order for the winding up of corporations" (405). However there was nothing to prevent the Commonwealth from conferring power of that kind on the Supreme Court of the Australian Capital Territory (405). Reference should be made in that regard to the developing jurisprudence about the interaction of Ch III and the Territories' power in Spratt v Hermes [1965] HCA 66 ; (1965) 114 CLR 226; Capital TV and Appliances Pty Ltd v Falconer [1971] HCA 10 ; (1971) 125 CLR 591; Re Governor, Goulburn Correctional Centre; Ex parte Eastman [1999] HCA 44 ; (1999) 165 ALR 171 and in the joint judgment of Black CJ and Hely J in North Australian Aboriginal Legal Aid Service Inc v Bradley [2002] FCAFC 297 ; (2002) 122 FCR 204 at [106] [133].