Number 10
30 October 2003
The Constitution and the
States
This appeal dealt with the right
to proceed against a State in a constitutional
matter arising in federal jurisdiction. The case
is significant for its consideration of aspects
of the recovery of invalid taxes.
British American Tobacco Australia
Ltd v Western Australia
High Court of Australia, 2 September
2003
[2003] HCA 47; (2003) 200 ALR 403
Background
The appellant brought an action
in the WA Supreme Court seeking, amongst other
things, a declaration that s.6 of the Business
Franchise (Tobacco) Act 1975 (WA) invalidly
imposed excise duty (contrary to s.90 of the Constitution)
and an order for the repayment of licence fees
invalidly collected under that Act. A similar fee
imposed by NSW legislation had been struck down
by the High Court in Ha v New South Wales (1997)
189 CLR 465.
The appellant's action was summarily
dismissed by the Full Court of the WA Supreme Court
on the basis that the appellant had failed to give
written notice of its action as required by s.6
of the Crown Suits Act 1947 (WA) and s.47A
of the Limitation Act 1935 (WA). Section
6 provides that 'no right of action lies' against
the State unless the plaintiff gives to the WA
Crown Solicitor notice in writing of the circumstances
upon which the action will be based 'as soon as
practicable...after the cause of action accrues'.
Section 47A provides that 'no action shall be brought' against
any person (other than the State) 'for any act
done in pursuance or execution or intended execution
of any Act, or of any public duty or authority''unless
the prospective plaintiff gives to the prospective
defendant notice in writing of the circumstances
upon which the action will be based 'as soon as
practicable...after the cause of action accrues'.
The appellant argued that because
the action involved a question arising under the
Constitution (that is, the operation of s.90 of
the Constitution), it was within federal jurisdiction.
State provisions cannot apply of their own force
in federal jurisdiction. Instead, they only apply
if picked up by s.79 of the Judiciary Act 1903 (Cth).
Section 79, however, does not pick up State provisions
if the Constitution or a Commonwealth law 'otherwise
provides'.
In this case, the appellant argued
that both the Constitution and s.64 of the Judiciary
Act ('In any suit to which the Commonwealth
or a State is a party, the rights of parties shall
as nearly as possible be the same, and judgment
may be given and costs awarded on either side,
as in a suit between subject and subject.') 'otherwise
provided' so that s.6 of the Crown Suits Act was
not picked up. Nor was s.47A of the Limitation
Act rendered applicable by s.64 of the Judiciary
Act.
WA argued that s.64 of the Judiciary
Act does not render s.6 and s.47A inapplicable
because:
- s.64 does not operate unless a right of action
otherwise exists. However, no right of action exists
unless a notice has been given pursuant to s.6 of
the Crown Suits Act - s.64 does not apply where the State is performing
a function peculiar to government (such as the collection
of taxes) as consequential proceedings cannot be
equated to a 'suit between subject and subject' - s.64 is invalid if it purports to impose a substantive
liability on WA to pay the amount claimed - as s.47A of the Limitation Act applies to a suit
between subject and subject, its application in federal
jurisdiction is not precluded by s.64. As s.47A imposes
an obligation to give written notice similar to that
in s.6, the result remains the same even if s.6 does
not apply.
The Commonwealth Attorney-General
intervened in the High Court to support WA's second
and fourth arguments.
High Court's Decision
The appeal was heard by six Justices
and unanimously upheld. The summary judgment entered
against the appellant was set aside. The High Court's
decision means that the appellant can now pursue
its action for the recovery of the invalidly collected
franchise fees. Whether it succeeds at the trial
of that action will presumably involve consideration
of any defences on which the State might now rely.
Federal Jurisdiction
The Court decided, first, that the
matter involved the exercise of federal jurisdiction.
Gleeson CJ, McHugh, Gummow, Hayne and Callinan
JJ considered that the appellant's common law claim
for money had and received involved a matter 'arising
under' the Constitution within the meaning of s.76(i)
of the Constitution because it involved the contention
that the franchise fees were excises and invalidly
exacted by reason of s.90 of the Constitution.
Federal jurisdiction in respect of the claim was
conferred on the WA Supreme Court by s.39(2) of
the Judiciary Act.
Kirby J considered that the claim
came within s.76(i) at least because it involved
the 'interpretation' of the Constitution. He also
considered that the claim was within federal jurisdiction
because it came within the diversity jurisdiction
(s.75(iv) of the Constitution). In so holding,
he rejected longstanding authority that corporations
were not 'residents' of a State for the purposes
of that provision.
The Right to Proceed
It was then necessary to consider
how the appellant had a right to proceed against
the State for its claim in federal jurisdiction.
Gleeson CJ considered that while the appellant's
cause of action arose under the common law, the
right to proceed against the State in this case
is implied from the Constitution. He reasoned that
the Constitution defines both the powers of the
Commonwealth and, to a more limited extent, the
powers of the States. The right to proceed against
both the Commonwealth and the States in respect
of matters concerned with the scope of powers defined
under the Constitution is therefore conferred by
necessary implication from the Constitution itself:
in the case of the Commonwealth, by implication
from s.75(iii) of the Constitution; in the case
of the States, by implication from the particular
provision limiting State power (in this case, s.90).
The Commonwealth Attorney-General had put submissions
substantially to this effect.
In a joint judgment, McHugh, Gummow
and Hayne JJ (with whom Callinan J agreed) considered
that the right to proceed was conferred in this
case by necessary implication from the conferral
of federal jurisdiction by s.39(2) of the Judiciary
Act. In their view, a law like s.39(2), which invests
State courts with jurisdiction in the terms of
s.76(i) of the Constitution, is a law which necessarily
subjects the States to the relevant exercise of
the judicial power of the Commonwealth.
Kirby J took a different approach,
and held that in this case the Constitution (and
not just the common law) created the cause of action
and conferred the right to proceed. In doing so
he held that the decision of the High Court in Kruger
v The Commonwealth (1997) 190 CLR 1 was incorrect.
Application of the Crown Suits Act
Finally, the Court addressed the
application of the State provisions in question.
Gleeson CJ considered that s.6 of the Crown Suits
Act was not picked up by s.79 of the Judiciary
Act because the rules relating to Crown immunity
from suit are either irrelevant to a claim based
upon a contention that a State has acted in contravention
of a Constitutional limitation, or if they are
applicable, because the Constitution otherwise
provides (that is, the Constitution, by implication,
confers the appellant's right to proceed against
the State, and recourse to the provisions of the
Crown Suits Act as conferring and regulating a
right to proceed is neither necessary nor appropriate).
McHugh, Gummow and Hayne JJ (with
whom Callinan J agreed) considered that s.79 of
the Judiciary Act could only pick up s.6 of the
Crown Suits Act if it also picked up s.5 of that
Act (which provides that the Crown may sue and
be sued in the same manner as a subject, that is,
gives a right to proceed). Section 5, however,
could not be picked up because a law of the Commonwealth
(s.39(2) of the Judiciary Act, which in their opinion
conferred the right to proceed in this case) 'otherwise
provided'. They also considered that s.79 could
not pick up s.6 (if it could be separated from
s.5) because s.64 of the Judiciary Act would then
be a law which 'otherwise provided'. This was because,
if it applied, s.6 would then put the State in
a special position contrary to s.64. Further:
-
when the action was brought
in the Supreme Court the condition for the operation
of s.64 was satisfied. The action was 'validly
constituted' (cf. WA's first argument) because
s.6 had no application in federal jurisdiction. -
they also rejected WA's (second)
argument that because the claim related to a
peculiarly government function (the collection
of revenue) it was not possible to put the parties
in 'as nearly as possible' the same situation
as in a suit between subject and subject. They
considered that s.64, which is a facilitative
provision and which otherwise assists the appellant,
should not be given a limited operation by an
expanded reading of the phrase 'as nearly as
possible'.
Kirby J again favoured (without
finally deciding) a different approach. In his
view it is misconceived to describe a State as
a manifestation of the Crown. The Crown Suits Act,
which appears to refer to actions against the Crown
rather than against the State, would therefore
be inapplicable. But in any event, he agreed with
McHugh, Gummow and Hayne JJ that s.79 did not pick
up s.6 of the Crown Suits Act because s.39(2) of
the Judiciary Act 'otherwise provided'.
Section 47A of the Limitation Act
Gleeson CJ rejected WA's fourth
argument that the effect of s.64 of the Judiciary
Act is to render s.47A of the Limitation Act applicable
and thereby defeat the appellant's claim. Section
47A deals with a suit against a very particular
kind of defendant, in relation to a very particular
kind of act of neglect or default. It deals with
agents of the Crown, and confers upon them a protection
similar in some respect to that provided to the
Crown by the Crown Suits Act. If s.64 were to operate
in this case, it would not do so by applying s.47A
and thereby putting the Government of WA in the
place of an agent of the Government of WA; it would
do so by putting the Government in the place of
an ordinary citizen. The other members of the Court
did not deal with this issue and might have left
it to be decided in the trial of the appellant's
claim.
Text of the decision is at http://www.austlii.edu.au/au/cases/cth/high_ct/2003/47.html.
Contact for further information:
David Bennett
Deputy Government Solicitor
Tel: (02) 6253 7063
Fax: (02) 6253 7303
E-mail: david.bennett@ags.gov.au
Commonwealth Constitutional
Powers and the States
This decision concerns the ambit
of an implied constitutional limit on Commonwealth
power arising from the federal compact and reflects
a shift in judicial thinking in this area. Special
Commonwealth laws applying only to State officials,
that were intended to replicate as closely as
possible other generally applying laws, were
struck down on the basis that they contravened
this limit. As a result, any laws applying only
to the States, even if enacted within a broader
statutory framework, will need to be carefully
considered to ensure that they do not contravene
this limit.
Austin and Anor v Commonwealth
High Court of Australia, 5 February
2003
[2003] HCA 3; (2003) 195 ALR 321
Background
This case involved a challenge to
the validity of the Superannuation Contributions
Tax (Members of Constitutionally Protected Superannuation
Funds) Imposition Act 1997 (Cth) ('the Imposition
Act') and the Superannuation Contributions Tax
(Members of Constitutionally Protected Superannuation
Funds) Assessment and Collection Act 1997 (Cth)
('the Assessment Act') in their application to
a NSW Supreme Court judge (the first plaintiff)
and a Victorian Supreme Court master (the second
plaintiff).
The case was heard by six members
of the High Court. Callinan J did not sit.
High Court's Decision
The Court unanimously rejected the
plaintiffs' construction arguments and held the
superannuation surcharge legislation purported
to apply to the first plaintiff. Further, the Court
unanimously held that the legislation did not purport
to apply to the second plaintiff, as she came within
a statutory exception to the surcharge. However,
the majority of the Court held (with Kirby J dissenting)
that the surcharge legislation was invalid in its
application to State judges.
Construction arguments
The plaintiffs argued that the superannuation
surcharge legislation did not apply to them because
they were not members of superannuation funds as
defined and did not accrue any superannuation benefits
prior to retirement.
The Court acknowledged that some
of the language in the Assessment Act (such as 'fund')
did not naturally apply to a judges' pension scheme,
but held that the Court should not adopt a literal
construction if that caused the operation of the
Act to miscarry [101]. In this respect, taxation
legislation was like any other legislation. Accordingly,
the legislation applied.
Constitutional arguments
The plaintiffs also argued that
the legislation was invalid because:
(a) it discriminated against the
States by placing a special burden or disability
on the States and thereby contravened the first
limb of the Melbourne Corporation doctrine
(b) it operated to destroy or curtail
the continued existence of the States or their
capacity to function as governments and thereby
contravened the second limb of the Melbourne
Corporation doctrine
(c) the surcharge was so arbitrary
or capricious that it could not properly be characterised
as a tax, and
(d) the Imposition Act dealt with
more than one subject of taxation, and thereby
contravened s.55 of the Constitution (laws imposing taxation shall deal with one subject of taxation
only).
A further objection that the superannuation
surcharge legislation imposed a tax on property
belonging to a State, contrary to s.114 of the
Constitution, was abandoned in oral argument.
The Attorneys-General of the States
of NSW, Victoria, South Australia and Western Australia
intervened in support of the plaintiffs. SA and
WA put further arguments as to the invalidity of
the legislation, namely:
-
by requiring the States to
calculate a judge's surchargeable contributions
the Assessment Act impermissibly imposed an official
duty on State officers and conscripted the States
to perform Commonwealth functions, and -
by requiring the engagement
of a suitably qualified actuary to perform the
necessary calculations, the Assessment Act impaired
the ability of a State to determine the number
and identity of its employees or to determine
their terms and conditions of employment.
The plaintiffs' constitutional arguments
outlined in (c) and (d) above were rejected by
Gaudron, Gummow and Hayne JJ [182]–[201], with
Gleeson CJ, McHugh and Kirby JJ agreeing on this
point. The Court confirmed that a tax is not 'arbitrary' simply
because it depends on the formation of an administrative
opinion, or because it will entail hardship [186],
and also confirmed that the Parliament has considerable
latitude in determining the subjects of taxation
for the purposes of s.55 of the Constitution (see
[199]).
Melbourne Corporation doctrine
Melbourne Corporation v The Commonwealth (1947)
74 CLR 31 held that Commonwealth legislative power
is subject to the implied limit that it cannot
undermine the separate existence of the States
as governments. Here, the Court held that the superannuation
surcharge legislation contravened this principle,
because it interfered with the States' freedom
to select the method of remunerating State judges.
Briefly, in the ordinary case,
the superannuation surcharge is imposed on the
superannuation provider, in the expectation that
it will be passed on to the member by way of reduced
superannuation benefits. In the case of members
of 'constitutionally protected superannuation funds',
however, the surcharge is imposed directly on the
member. This was done because there were thought
to be constitutional difficulties (in particular,
the operation of s.114 of the Constitution) in
imposing the tax on the State superannuation provider.
The effect of this special scheme, however, was
that, unless the States amended their pension schemes
to allow for the commutation of the pension to
a lump sum, a State judge could face a significant
lump sum liability on retirement.
In the majority's view, the Commonwealth
legislation had the practical effect of requiring
the States to amend their arrangements for providing
judicial pensions and this meant that there had
been, in a significant manner, a curtailment or
interference with the exercise of State constitutional
power (see [168]–[170] per Gaudron, Gummow and
Hayne JJ; see also [28]–[29] per Gleeson CJ, [233]
per McHugh J). The majority's reasoning was strongly
influenced by Re Australian Education Union;
Ex parte Victoria (1995) 184 CLR 188, which
held that the 'integrity and autonomy' of the States
requires that the States have almost complete freedom
to determine the terms and conditions of their 'higher
level' officials (including State judges).
The majority also considered that
the surcharge adversely affected the capacity of
the States to recruit judges and to retain them
after the first possible date for retirement (see
[28] per Gleeson CJ, [169] per Gaudron, Gummow
and Hayne JJ, [232] per McHugh J), in particular,
because the surcharge debt was required to be paid
as a lump sum upon retirement, the level of the
debt could significantly exceed the level of the
pension and the debt increased by way of compound
interest, including after the first possible date
for retirement.
The Court noted that there was no
constitutional problem with State judges paying
general Commonwealth taxes, such as income tax
[176]; (see also [22] per Gleeson CJ, [287] per
Kirby J).
Kirby J dissented, because he did
not think that the superannuation surcharge had
a significant detrimental effect on the ability
of the States to determine the terms and conditions
of State judges [290] and did not affect the ability
of the States to recruit or retain judges [291]–[293],
[299].
One limb or two?
The Melbourne Corporation doctrine
had been understood to consist of two separate
prohibitions: (1) a prohibition on Commonwealth
laws that imposed special burdens or disabilities
on the States and (2) a prohibition against enacting
laws of general application that prevented the
States from functioning as governments (which protects,
among other things, the 'integrity and autonomy' of
the States). In Austin, however, four members
of the Court held that there was a single prohibition:
the Commonwealth cannot restrict or burden the
States in the exercise of their constitutional
powers [124], [143] per Gaudron, Gummow and Hayne
JJ, [281] per Kirby J; contra [223] per McHugh
J). While the practical significance of this change
is unclear, it may be that the Commonwealth has
more scope to enact laws that impose a special
burden on the States, provided that these discriminatory
laws do not restrict or burden the States in their
exercise of constitutional powers.
Gaudron, Gummow and Hayne JJ (with
Gleeson CJ agreeing on this point) found it unnecessary
to address the further constitutional arguments
put forward by SA and WA [181]. Kirby J, however,
rejected those arguments [270]–[274].
Text of the decision is available
at http://www.austlii.edu.au/au/cases/cth/high_ct/2003/3.html.
Contact for further information:
Jenny Burnett
Senior Executive Lawyer
Tel: (02) 6253 7012
Fax: (02) 6253 7303
E-Mail: jenny.burnett@ags.gov.au
Constitutional Limits on
Restricting Judicial Review
This decision of the High Court
is relevant to the construction of Commonwealth
statutory provisions (known as 'privative clauses')
intended to restrict judicial review of Commonwealth
administrative decisions, and in considering
the availability of other means of restricting
such review.
These proceedings raised the
question of the construction and constitutional
validity of the privative clause in s.474 of
the Migration Act 1958 which was designed
to restrict significantly the availability of
judicial review of migration decisions. They
also involved the question of the construction
and validity of s.486A of the Migration Act which
imposed a strict time limit of 35 days on applying
to the High Court for review of decisions affected
by the privative clause in s.474.
The High Court unanimously held
that s.474 and s.486A are valid but construed
them so as to reduce significantly the scope
of their intended effect. Gaudron, McHugh, Gummow,
Kirby and Hayne JJ gave a joint judgment and
Gleeson CJ and Callinan J each gave separate
judgments.
Plaintiff S157 of 2002 v Commonwealth
High Court of Australia, 4 February
2003
[2003] HCA 2; (2003) 195 ALR 24
Background
The plaintiff sought a declaration
in the original jurisdiction of the High Court
that s.474 and s.486A of the Migration Act are
invalid. He asserted that, but for s.474 and s.486A,
he would have applied to the High Court for relief
under s.75(v) of the Constitution in relation to
a decision of the Refugee Review Tribunal alleging
a denial of procedural fairness.
Section 474 was enacted in the form
of a Hickman clause which, read literally,
excludes the jurisdiction of courts to review the
decisions to which it applies, but has been construed
by the courts to allow review on three narrow grounds – that
the decision was not made bona fide, did not relate
to the subject-matter of the Act under which the
decision was made and was not reasonably referable
to the power of the decision-maker (R v Hickman;
Ex parte Fox and Clinton (1945) 70 CLR 598).
This rule of construction is a means of reconciling
provisions in an Act which impose requirements
on the decision-maker with provisions which purport
to exclude the jurisdiction of the courts to review
the decision. The rule is subject to the proviso
that truly jurisdictional ('inviolable') limitations
will be enforced by the courts; the question whether
a limitation is inviolable is a matter of construction
(see, e.g., R v Murray; Ex parte Proctor (1949)
77 CLR 387, 400).
One view of a clause of this kind
had been that it operates to expand the jurisdiction
of the decision-maker to allow the making of a
decision that need only conform with the three Hickman conditions
(DCT v Richard Walter Pty Ltd (1995) 183
CLR 168, 179, 205–207, 220). On this view, the
effect of a privative clause is that a decision
conforming with the Hickman conditions cannot
involve jurisdictional error. The clause so construed
is unlikely to be inconsistent with s.75(v) of
the Constitution. Section 75(v) confers original
jurisdiction on the High Court in matters in which
a writ of mandamus or prohibition or an injunction
is sought against an officer of the Commonwealth
and has generally been seen as conferring jurisdiction
to grant relief in relation to decisions of Commonwealth
officers involving jurisdictional error.
It is clear from the explanatory
memorandum and second reading speech that s.474
was enacted in reliance on the Hickman line
of authority and that the intention of the provision
was to restrict judicial review of most migration
decisions to the Hickman conditions.
Privative clause – section 474
All members of the Court accepted
that s.474 cannot be read literally as, so read,
it would be inconsistent with s.75(v) of the Constitution.
Joint judgment
The joint judgment rejected the
notion that a Hickman clause is to be read
as expanding the jurisdiction of the decision-maker
to make a decision which conforms only with the Hickman conditions
[64], [91], [99].
Their Honours decided that the Hickman line
of authority had never been applied to give a privative
clause the effect of impliedly repealing all the
statutory limitations on the exercise of a statutory
power and s.474 could not be read in this way [67].
They found that the privative clause could not
be construed to extend to decisions purportedly made
under the Act (i.e. decisions involving jurisdictional
error) otherwise the clause would be inconsistent
with s.75(v) of the Constitution and would confer
authority on non-judicial decision-makers conclusively
to determine their own jurisdiction, possibly in
breach of the principle implied in Ch III of the
Constitution that judicial power be conferred only
on the courts specified in s.71 of the Constitution
[75]–[76].
They contemplated that the privative
clause could have the effect that 'some procedural
or other requirements laid down by the Act are
to be construed as not essential to the validity
of a decision' [69], i.e., the clause might have
the effect of limiting to some extent the errors
that can be classified as jurisdictional.
The joint judgment therefore concluded
that s.474 does not preclude judicial review for
jurisdictional error and is not inconsistent with
s.75(v) of the Constitution. Denial of procedural
fairness involves a jurisdictional error and the
decision the plaintiff seeks to impugn will not
be protected by s.474 from a finding of denial
of procedural fairness [83].
Gaudron, McHugh, Gummow, Kirby
and Hayne JJ indicated their view that the difference
between their understanding and the Commonwealth's
understanding of the Hickman line of authority
is 'not some logical or verbal quibble', but 'a
real and substantive' reflection of the propositions
that the High Court's jurisdiction under s.75(v)
cannot be removed and that the judicial power of
the Commonwealth cannot be exercised other than
in accordance with Ch III of the Constitution [98].
They indicated the possible constitutional difficulties
with some of the other means of seeking to achieve
the effect that s.474 of the Migration Act was
designed to achieve [100]–[103]. They concluded
that s.75(v) of the Constitution:
is a means of assuring to all
people affected that officers of the Commonwealth
obey the law and neither exceed nor neglect any
jurisdiction which the law confers on them. The
centrality, and protective purpose, of the jurisdiction
of this Court in that regard places significant
barriers in the way of legislative attempts (by
privative clauses or otherwise) to impair judicial
review of administrative action. Such jurisdiction
exists to maintain the federal compact by ensuring
that propounded laws are constitutionally valid
and ministerial or other official action lawful
and within jurisdiction. In any written constitution,
where there are disputes over such matters, there
must be an authoritative decision-maker. Under
the Constitution of the Commonwealth the ultimate
decision-maker in all matters where there is a
contest, is this Court. [104]
Gleeson CJ
Gleeson CJ was not prepared to
construe s.474 as intended impliedly to repeal
all the statutory limitations contained in the
Migration Act [26]–[27]. He took into account the
presumptions that legislation should be construed:
-
in accordance with Australia's
international obligations and the rule of law -
so as not to curtail fundamental
rights and freedoms or deny access to the courts,
and -
by reference to the whole
of the Act, not simply by reference in this case
to s.474 as the central or controlling provision.
[29]–[33]
If the Parliament had intended
to authorise the Refugee Review Tribunal acting
in good faith to affirm a refusal of a protection
visa made unfairly and in contravention of the
requirements of natural justice, it should have
made its intention clearer [37].
Callinan J
Callinan J recognised some of the
difficulties involved in immigration policy and
administration [116]–[117], [125] and considered
it important to recognise that the attack on the
validity of s.474 was an attack on the will of
the Parliament [118]. Nevertheless, he held that
s.474 does not protect decisions involving 'manifest
error of jurisdiction' or 'a departure from an
essential or imperative requirement' [160].
Time limit – section 486A
The plaintiff argued that s.486A
of the Migration Act is invalid on a number of
bases, most significantly on the basis that it
is inconsistent with the conferral on the High
Court of jurisdiction under s.75(v) of the Constitution.
Gaudron, McHugh, Gummow, Kirby and
Hayne JJ applied their reasoning in relation to
s.474 to hold that s.486A does not apply to a decision
involving jurisdictional error [86]–[87]. They
recognised that, on this construction, the time
limit will have limited effect but considered this
result unsurprising because the legislation had
proceeded on an incorrect view as to the Hickman line
of authority [88]–[91]. Gleeson CJ also considered
that s.486A does not apply to a decision involving
jurisdictional error [41].
Callinan J held that s.486A was
inconsistent with s.75(v) of the Constitution because
it denied applicants recourse to the remedies available
under s.75(v) [174]–[175].
Outcome
It therefore seems that privative
clause decisions which involve jurisdictional error
at common law (such as, for example, those involving
denial of procedural fairness, identification of
a wrong issue or reliance on irrelevant material)
will be amenable to judicial review despite s.474.
Section 474 may have some effect in determining
whether a statutory limitation is jurisdictional.
The consequences of the High Court's decision for
judicial review of privative clause decisions are
being worked out in a series of cases in the Federal
Court.
What remains unclear from the Court's
decision is the extent, if any, to which particular
grounds of review, such as denial of procedural
fairness, are constitutionally entrenched by s.75(v)
of the Constitution and the extent to which the
Commonwealth Parliament can legislate to provide,
other than by way of a privative clause, that a
decision-maker is authorised to make a decision
which would otherwise involve a jurisdictional
error, although the joint judgment suggests that
availability of review for fraud, bribery, dishonesty
or other improper purpose may be constitutionally
required [82].
Nor does the Court's decision resolve
the issues as to the capacity of the Parliament
to impose a strict time limit on s.75(v) applications
to the High Court.
Text of the decision is available
at http://www.austlii.edu.au/au/cases/cth/high_ct/2003/2.html.
Contact for further information:
Jenny Burnett
Senior Executive Lawyer
Tel: (02) 6253 7012
Fax: (02) 6253 7303
E-Mail: jenny.burnett@ags.gov.au
Public Law Remedies and
Private Bodies
This decision addresses the
issue of obtaining judicial review of a decision
made by a privately owned Corporations Act company
according to a statutory scheme. A majority of
the High Court took the view that the binding
recommendations of Australian Wheat Board (International)
Limited on the grant of bulk wheat export permits
were not amenable to judicial review. Nonetheless,
the reservations of the majority on making more
general statements about the issue and the dissent
of Kirby J may mean that further judicial challenges
will arise.
NEAT Domestic Trading Pty Limited
v AWB Limited
High Court of Australia, 19 June 2003
[2003] HCA 35; (2003) 198 ALR 179
Background
On 19 June 2003 a full bench of
five High Court justices handed down a decision
concerning whether decisions made under section
57 of the Wheat Marketing Act 1989 (the
Act) to refuse approval for six applications to
the Wheat Export Authority for bulk export permits
to NEAT Domestic Trading Pty Ltd (NEAT) were void
for failure to follow administrative law principles.
On 1 July 1999 a new scheme for
administering the export of wheat was introduced
with the creation of the Wheat Export Authority
(the Authority) and three companies incorporated
under the Corporations Law. As part of these arrangements,
Australian Wheat Board (International) Limited
(AWBI) was incorporated as a wholly owned subsidiary
of Australian Wheat Board Limited. AWBI is the
only company that can export wheat without applying
to the Authority for a permit (s.57(1A)). Moreover,
under the new scheme the Authority cannot give
consent to bulk exports 'without prior approval
in writing' from AWBI (s.57(3B)). Thus, AWBI, which
is owned and controlled by growers and not the
Commonwealth, has a right of veto over exports
from Australia and since 1 July 1999 has approved
a bulk export in only one instance.
The explanatory memorandum for the Wheat
Marketing Legislation Amendment Act 1998 which
initiated these changes explained them as necessary
for competing with the 'interventionist polices
of other grain producing countries such as the
US and EU' and so endorsed an 'export monopoly' to 'maximise
the net returns to growers'. This is called 'the
single desk' approach.
NEAT's application for bulk export
In this context NEAT made six applications
to export bulk quantities of durum wheat in circumstances
which related to specific business opportunities
unconnected with those of AWBI and where it claimed
that the interests of AWBI were not affected. AWBI
did not give its approval for any of these applications
and referred to a policy whereby it said that issuing
any bulk permits would detract from the single
desk policy and benefit a select group of growers
to the detriment of those who delivered their grain
to the national pool.
NEAT's Case
NEAT sought judicial review in the
Federal Court of the decision by AWBI to refuse
to give approval for a permit to be issued by the
Authority. The argument for judicial review was
that there had been an inflexible application of
policy. That is, that AWBI 'was acting in accordance
with a rule or policy without regard to the merits
of the case' [17]. NEAT argued that under ss.5(2)(f)
and 6(2)(f) of the Administrative Decisions
(Judicial Review) Act 1977 this was a decision
of an administrative character made under an enactment
and reviewable under that Act.
High Court's Decision
Gleeson CJ
Gleeson CJ decided that AWBI was
able to apply such a strict policy in light of
the Act's monopolistic scheme and NEAT's appeal
failed. The policy was not inconsistent with the
Act nor was any claim advanced to render the policy
irrelevant. Gleeson CJ then stated that it was 'strictly
unnecessary to decide whether the withholding of
an approval by AWBI was a decision of an administrative
character made under an enactment'. Nonetheless,
he expressed his 'preference' that the withholding
of the approval by AWBI was such a decision and '[t]o
describe it as representing purely private interests
is inaccurate' [27].
McHugh, Hayne and Callinan JJ
In
a joint judgment the following questions were identified:
-
can public law remedies be
granted against private bodies? -
do public law remedies lie
where AWBI fulfils the role it plays under the
Act? [49]
The judgment concluded that the
private character of AWBI as a company incorporated
under the corporations law for the pursuit of,
in this instance, maximizing returns to those who
sold wheat through pool arrangements, meant that
it is not possible to impose public law obligations
on AWBI while at the same time accommodating pursuit
of its private interests [51].
Section 57(3B) could not be interpreted
as imposing a duty on AWBI to take into account
any 'public' considerations, such as those implied
from the subject–matter, scope or purpose of the
Act, in deciding whether to grant approval. Further,
AWBI 'could not be compelled, by mandamus or otherwise,
to decide whether to grant or not grant its approval
[because] it was under no statutory, or other,
obligation to consider that question' [58].
The judgment noted the intersection
between the private and the public when a private
corporation is given a role in a scheme of public
regulation. The court had not been informed of
any other federal legislation in which there was
a similar intersection. 'If processes of privatisation
and corporatisation continue, it may be that an
intersection of this kind will be encountered more
frequently' [49].
The judgment warns that the conclusion
in this particular matter 'is not to be understood
as an answer to the more general question [they]
identified' about applying public law remedies
to private bodies [50].
Kirby J
In his dissenting judgment Kirby
J both supported the availability of public law
remedies over some private bodies (as established
in R v Panel on Take-overs and Mergers, Ex parte
Datafin Plc (1987) QB 815 and Forbes v New
South Wales Trotting Club Ltd (1979) 143 CLR
242) and also took the view that the decision of
AWBI was an administrative decision made under
an enactment. Kirby J argued that the nature of
the decision maker as a private company was irrelevant
to the public power being exercised. Kirby J stated:
Whilst such features of AWBI
may be relevant to the character of particular
decisions that it makes, they are not determinative.
In a particular case, a statutory scheme may have
entrusted decisions of a public, governmental or
regulatory character to a private corporation,
involving that body, to that extent, in the exercise
of public power. [99]
Moreover, Kirby J saw constitutional
implications for these types of delegations and
warned that the:
constitutionally entrenched power
of judicial review is one of the limits on the
extent to which corporatisation and privatisation
of federal administrative action in Australia may
escape the disciplines of judicial scrutiny. [103]
Kirby J emphasised that rights to
challenge the decision of the Authority 'would
be reduced to nought' if the decision of the AWBI
could not be reviewed and this would result in
AWBI coming 'close to possessing absolute legal
power' [108] and [105]. Kirby J felt that the facts
of NEAT's applications warranted greater consideration
from AWBI and were thus unlawful.
Implications for Judicial Review
The implications of this decision
are that where a privately owned Corporations Act
company makes decisions under an enactment it may
be free to pursue its own interests without regard
to public law considerations. This will occur where
the legislation in question allows the interests
of the corporation to be the sole consideration
in reaching its decision. Such decisions may not
be amenable to judicial review. However, there
is a clear indication that the private nature of
the decision-making entity will not necessarily
make it immune from having to comply with public
law procedures. Additionally, given the three to
two division against the applicability of the Administrative
Decisions (Judicial Review) Act 1977 in this
particular instance, coupled with a warning that
it might apply in other legislative schemes, further
litigation in this area seems likely.
The text of this decision can be
found at http://www.austlii.edu.au/au/cases/cth/high_ct/2003/35.html.
This briefing was prepared by
AGS lawyer Peter Nicholas while a graduate lawyer
at AGS under the supervision of Madeline Campbell,
Senior Executive Lawyer.
Contact for further information:
Madeline Campbell
Senior Executive Lawyer
Tel: (02) 6253 7408
Fax: (02) 6253 7381
E-mail: madeline.campbell@ags.gov.au
High Court Constitutional
Decisions in Brief
Chief Executive Officer of Customs
v Labrador Liquor Wholesale Pty Ltd
5/9/03, [2003] HCA 49; (2003) 201 ALR 1
In this appeal the High Court unanimously
decided that in order to obtain a conviction in
a customs or excise prosecution in the Queensland
Supreme Court the criminal standard of proof beyond
reasonable doubt must be satisfied. The Court also
decided that the provisions of the Evidence
Act 1977 (Qld) which apply in civil cases in
the Supreme Court are to be applied in the trial
of customs and excise prosecutions.
The appellant brought proceedings
against the respondents in the Queensland Supreme
Court alleging that they had moved goods without
authorisation and evaded customs and excise duty
contrary to ss 33 and 234(1)(a) and (d) of the Customs
Act 1901 (Cth) and ss 61 and 120(1)(iv) of
the Excise Act 1901 (Cth).
The proceedings were a 'customs
prosecution' and an 'excise prosecution' within
the meaning of the Customs Act (s.244) and the
Excise Act (s.133) respectively. Those Acts both
relevantly state that the proceedings may be 'commenced
prosecuted and proceeded with in accordance with
any rules of practice (if any) established by the
Court for Crown suits in revenue matters or in
accordance with the usual practice and procedure
of the Court in civil cases or in accordance with
the directions of the Court or a Judge' (s.247
of the Customs Act, s.136 of the Excise Act). Customs
and excise prosecutions have traditionally been
conducted as civil prosecutions for the recovery
of pecuniary penalties.
The leading judgment is that of
Hayne J (with whom Gleeson CJ and McHugh J agreed).
Hayne J considered that the standard of proof to
be applied in a customs or excise prosecution was
not a matter of 'practice and procedure' within
the meaning of s.247 of the Customs Act and s.136
of the Excise Act. As the Customs Act and the Excise
Act therefore did not provide for the standard
of proof to be applied, it was necessary to consider
the operation of ss 79 and 80 of the Judiciary
Act 1903 (Cth). Section 79 picks up and applies
State laws, including the laws relating to procedure,
evidence and the competency of witnesses, in matters
within federal jurisdiction. However, no Queensland
Act prescribes the standard of proof to be applied
in customs and excise prosecutions. The relevant
section was therefore s.80. Section 80 picks up
and applies the common law, as modified by the
Constitution and State statute law, to matters
within federal jurisdiction. The question was therefore
what standard of proof the common law requires
in respect of customs and excise prosecutions.
Hayne J considered that where a prosecution for
pecuniary penalties seeks a conviction for an offence
against a law of the Commonwealth, the common law
requires proof to the criminal standard of beyond
reasonable doubt.
Hayne J considered that s.247 of
the Customs Act and s.136 of the Excise Act required
that those provisions of the Queensland Evidence
Act concerning matters of practice and procedure
that would be applied in a civil case (including
the provisions regulating the admissibility of
evidence) be applied in these proceedings in the
Queensland Supreme Court.
The approach taken to the question
of the applicable standard of proof meant that
it was unnecessary for the Court to consider the
respondent's constitutional argument that application
of the civil standard of proof would contravene
s.71 of the Constitution as it would require a
court to exercise federal judicial power in a manner
inconsistent with the essential character of a
court or with the nature of judicial power.
http://www.austlii.edu.au/au/cases/cth/high_ct/2003/49.html
Contact for further information
on the decision in Labrador:
Simon Daley
Special Counsel Litigation
Tel: (02) 9581 7490
Fax: (02) 9581 7559
E-mail: simon.daley@ags.gov.au
Re Maritime Union of Australia;
Ex parte CSL Pacific Shipping
7/8/03, [2003] HCA 43; (2003) 200 ALR 39
The High Court considered whether
the extended operation of the Workplace Relations
Act 1996 (Cth) provided by s.5(3)(b) gave the
Australian Industrial Relations Commission jurisdiction
to make an award applicable to the foreign crew
of a foreign-registered ship. The ship had been
time-chartered to an Australian company and was
engaged in trade along the Australian coast pursuant
to permits granted under the Navigation Act
1912 (Cth). The case raised issues of statutory
construction and constitutional power. The High
Court held unanimously that the AIRC had jurisdiction
from s.5(3)(b) to make an award applying to the
ship's crew and that s.5(3)(b) was valid under
the trade and commerce power (s.51(i) of the Constitution).
http://www.austlii.edu.au/au/cases/cth/high_ct/2003/43.html
Oates v Attorney-General of the
Commonwealth
4/3/03, [2003] HCA 21; (2003) 197 ALR 105
The High Court held that the Extradition
Act 1988 does not confine the Commonwealth's
executive power to request extradition from another
country and extended to authorise the request
to Poland for extradition of the appellant.
http://www.austlii.edu.au/au/cases/cth/high_ct/2003/21.html
Fittock v The Queen; Ng v The
Queen
reasons published 10/4/03, [2003] HCA 19, 20; (2003) 197 ALR 1, 10
The High Court held that s.68 of
the Judiciary Act 1903 validly applied the
reserve juror provisions of the Juries Act 1996 (NT)
and the additional juror provisions of the Juries
Act 1967 (Vic) to trials for Commonwealth offences.
In particular, the Court rejected the applicants' arguments
that the application of the reserve and additional
juror provisions to the conduct of their trials
infringed s.80 of the Constitution (trial on indictment
of a Commonwealth offence shall be 'by jury').
The reserve and additional juror provisions allow
for the empanelment of reserve or additional jurors
to seek to ensure that, if any jurors are discharged
during the trial, sufficient jurors remain available
when the jury retires to consider its verdict.
The High Court considered that the application
of the provisions did not conflict with any of
the essential features of the trial by jury required
by s.80. The decision of the High Court reduces
the prospects of Commonwealth trials being aborted
on the basis that the number of jurors has fallen
below a statutory minimum.
Fittock also raised the
question of whether s.80 applies in the territories
of the Commonwealth. In light of their finding
that s.80 would not be infringed, all justices
of the Court considered it unnecessary to determine
whether the Court should reconsider the decision
in R v Bernasconi (1915) 19 CLR 629 which held that s.80 does not apply to trials on indictment
in the territories.
http://www.austlii.edu.au/au/cases/cth/high_ct/2003/19.html
The Queen v Gee
13/3/03, [2003] HCA 12; (2003) 196 ALR 282
The High Court held that ss 72–77
of the Judiciary Act 1903 (which provide
a procedure for reservation of questions of law
in trials of Commonwealth offences in relatively
limited circumstances and only at the instance
of the accused) are not inconsistent with and do
not exclude any general jurisdiction which would
otherwise be conferred on the SA Supreme Court
by s.68(2) of the Judiciary Act to direct the reservation
of questions of law in the same way as in the trial
of a State offence. Section 68(2) of the Judiciary
Act gives State courts which have jurisdiction
in relation to the trial of State offences the 'like
jurisdiction' in relation to Commonwealth offences.
Section 350 of the Criminal Law Consolidation
Act 1935 (SA) provides a mechanism for the
Supreme Court to direct reservation of questions
of law in trials for State offences and was picked
up by s.68(2).
The inconsistency question arose
in a case where the prosecutor, the Commonwealth
Director of Public Prosecutions, sought the reservation
of questions of law. The decision of the High Court
confirms the availability of State and Territory
procedures for reserving questions of law in trials
for Commonwealth offences.
http://www.austlii.edu.au/au/cases/cth/high_ct/2003/12.html
Roberts v Bass
12/12/02, [2002] HCA 57; (2002) 194 ALR 161
This decision involved the first
consideration by the High Court since Lange
v Australian Broadcasting Corporation (1997)
189 CLR 520 of the interaction between the law
of defamation and the freedom of political communication
implied in the Commonwealth Constitution. The High
Court determined the question of what constitutes
malice on the part of a person who publishes material
during an election campaign which would overcome
a defence of common law qualified privilege. Malice
is established where the publication is actuated
by an improper motive, and a majority of the High
Court held that publishing electoral material (information,
arguments, facts and opinions about a parliamentary
candidate and his or her policies) with a view
to damaging the candidate's prospects of election
is not an improper motive; it is indeed 'central
to the electoral and democratic process'. Nor is
it necessary for a person publishing material to
establish a positive belief in the truth of the
material in order to avoid a finding of malice.
If this were not so, the common
law of qualified privilege would not conform with
the freedom of political communication and would
need to be developed to comply with the Constitution.
The appeal arose out of a defamation
action brought by a candidate for re-election at
the 1997 SA State General Election in respect of
election material written and published by a person
representing the Clean Government Coalition, some
of which was also distributed on election day as
a how-to-vote card by a member of a local public
interest group. The South Australian courts found
both defendants to be liable. By majority, the
High Court allowed the appeal and set aside the
judgment against the defendants. The Court ordered
that there be a new trial of the action against
the Clean Government Coalition defendant as the
District Court had not made sufficient findings
to determine whether that defendant had merely
been providing electors with information about
the candidate or had been actuated by an improper
motive.
http://www.austlii.edu.au/au/cases/cth/high_ct/2002/57.html
Re Minister for Immigration and
Multicultural Affairs; Ex parte Te and Re Minister
for Immigration and Multicultural Affairs; Ex
parte Dang
7/11/02, [2002] HCA 48; (2002) 193 ALR 37
The High Court decided that the
applicant in each case was an 'alien' for the purposes
of the Commonwealth's power to make laws with respect
to 'naturalization and aliens' (s.51(xix) of the
Constitution). The decision confirms the Commonwealth's
power to make laws regulating the presence in,
and removal from, Australia of any person who is
not an Australian citizen (other than certain British
subjects).
Mr Te was of Cambodian origin,
came to Australia as a refugee in 1983 and committed
several heroin trafficking offences. He was ordered
to be deported under the criminal deportation provisions
of the Migration Act 1958. Mr Dang was of
Vietnamese origin, came to Australia as a refugee
in 1981 and committed numerous offences, including
armed robbery and heroin trafficking offences.
The Minister cancelled his visa, the effect of
which is to render him subject to removal from
Australia. Neither applicant was an Australian
citizen.
In each case, the applicant argued
that the relevant provisions of the Migration Act
could not validly apply to him because he owed
allegiance to the Queen of Australia and to no
other power and/or because he had been absorbed
into the Australian community, and so was no longer
an alien. The applicants relied on the High Court's
decision in Re Patterson; Ex parte Taylor (2001)
207 CLR 391 in which the Court, by a 4–3 majority,
overruled previous High Court authority and held
that a British subject non-citizen (at least if
born in the United Kingdom) who arrived in Australia
before 1973 (or, perhaps, 1987) is not necessarily
an alien for the purpose of the aliens power.
The High Court unanimously held
that the applicants in these cases were aliens
and therefore subject to the relevant provisions
of the Migration Act. The members of the Court
who formed the majority in Patterson in
effect confirmed that the category of non-citizen
non-aliens extends only to the British subjects
referred to in Patterson. The minority judges
in Patterson adhered to their view that
the Parliament can treat as an 'alien' any person
born outside Australia whose parents were not Australians
and who has not been naturalised.
In Shaw v Minister for Immigration
and Multicultural Affairs, which was heard
by the High Court on 17 June 2003 and in which
judgment is reserved, the Commonwealth argued
that the Court should overrule the decision in Patterson and
adopt the approach of the minority in that case.
http://www.austlii.edu.au/au/cases/cth/high_ct/2002/48.html
Solomons v District Court of
New South Wales
10/10/02, [2002] HCA 47; (2002) 192 ALR 217
The High Court decided that the Costs
in Criminal Cases Act 1967 (NSW) does
not apply to the prosecution of a Commonwealth
offence. The NSW Act establishes a mechanism
for the payment from the NSW Consolidated Revenue
Fund to an acquitted person of their costs of
defending the prosecution. The High Court held
that the NSW Act was limited to prosecutions
for State offences and was not picked up and
applied to a Commonwealth prosecution by s.79
of the Judiciary Act 1903 (which directs
the law that is to be applied by a court in the
exercise of federal jurisdiction).
http://www.austlii.edu.au/au/cases/cth/high_ct/2002/47.html
Macleod v Australian Securities
and Investments Commission
11/9/02, [2002] HCA 37; (2002) 191 ALR 543
The High Court held that the statutory
power of the predecessor of the Australian Securities
and Investments Commission to 'carry on' a prosecution
did not extend to bringing an appeal. The Court
applied the principle it had previously relied
on in Byrnes v The Queen (1999) 199 CLR
1 and Bond v The Queen (2000) 201 CLR 213,
that a prosecution appeal is an exceptional jurisdiction
which must be expressly conferred. The appeal in
question was to the Full Court of the WA Supreme
Court from a decision of a single judge of the
WA Supreme Court which had itself overturned a
conviction for an offence under the then Corporations
Law (WA). The High Court did not need to determine
whether conferral on the Commission of a power
to appeal in relation to a State offence would
have been within the legislative power of the Commonwealth.
http://www.austlii.edu.au/au/cases/cth/high_ct/2002/37.html
Contact for further information:
David Bennett
Deputy Government Solicitor
Tel: (02) 6253 7063
Fax: (02) 6253 7303
E-mail: david.bennett@ags.gov.au
For further information on
litigation
matters and services please contact:
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ISSN 1329-458X (Print)
ISSN 2204-6542 (Online)
For assistance with supply of copies, change of
address details etc Tel: (02) 6253 7052, Fax: (02)
6253 7313, Email: ags@ags.gov.au.
The material in these notes is provided
for general information only and should not be relied
upon for the purpose of a particular matter. Please
contact AGS before any action or decision is taken
on the basis of any of the material in these notes.